July 22, 2015

Six Tips to Get More Money For Your Paintings Without Hurting Sales

Pricing is the least understood facet of any business, but it’s one that can easily be fixed — without a negative impact. Most of the artists I know are underselling their art, struggling, having to paint too many paintings to keep their heads above water. They are on an exhausting treadmill because their prices are too low.

How would your life change if your prices were higher? If your immediate reaction is that you would sell less work, we need to work on your pricing strategy.

Most people in business get into business because they want to provide a good, quality service at a good price. They want to offer what they would want. Yet the number one reason for business failure is that profit margins are too low because of low prices.

Of course, low prices are necessary in some businesses because that’s their business model. Think Walmart. Yet the perception of Walmart’s prices and the reality are often two different things. Some companies promote low prices on high-volume items to get people into stores, yet other items may not be priced than you can find them elsewhere.

But as an artist, you’re not in the commodity business where, you produce lots of low-cost items. What you produce is a single, unique, handmade item by a well trained craftsperson — you. But do you think of yourself that way?

I can buy a chair for $20. I can buy a chair for $200. Or I can go into a craft gallery and buy a beautiful hand-crafted wooden chair for $1,500, knowing it's one of a kind. That chair won’t be for the person who buys chairs at Walmart, but there is a market, and there is a special person who will buy it.

You Are Not Your Customer

One of the hardest things to overcome for anyone in business, including artists, is understanding your market and understanding that you are not your market. An artist once said to me, “I want to sell my paintings cheap so that people like me can afford to own them.” Though that's admirable, people like him are not likely to want to own them. A painting is a luxury item, and the people who treat themselves to luxury items are not the average Joe. When I asked this painter how his sales were going, he told me they weren’t going well. He couldn’t understand it, because, as he said, “My prices are much lower than everyone else's.”

Let's look for a moment at the typical art gallery visitor. Perhaps it’s a couple, and both are lawyers making a half million a year. Instead of owning a Jaguar and a Lexus, they could afford to own four or five Kias. Why don’t they buy them and save their money? That takes us to tip #2.

Tip #2: Price is a signal of perceived quality.

In my art marketing seminar, a man told the story of being at an art show. A woman asked, “How much is this painting?” He responded that it was $4,000, and she said she would “take it." She handed him a check for $40,000. When he told her she had made a mistake and added an extra zero, she ripped up the check and said, “I don’t want it, then. It can’t be very good if it’s only $4,000.”

Tip #3: Certain people always want the best.

There is always an element of society who perceive themselves as needing the very best, and if it’s not the best — often signaled by the price — they won’t buy it. They don’t need bargains.

One of my mentors, Dan Kennedy, says that rich people have quirks. They will be cheap in one area and extravagant in others. For instance, he paid a million dollars to own a classic collectable car that had been owned by his favorite celebrity. He had no price resistance when told how much it cost — he didn't even negotiate. He simply wrote a check. Yet he also said, “When I buy shirts, I hate the idea of paying more than $30, so I always buy my shirts at Walmart.”

So how do you get your prices up?

I have two theories.

Tip #4: Build a luxury image and brand, and reinforce it constantly with everything you do.

First, luxury selling is all about perception. A Louis Vuitton bag is not a purse, it’s a handbag. A large coffee at Starbucks is a venti, and it’s not served by a clerk, but a barista. These and other companies focus on selling image. My favorite Louis Vuitton ad (at the top of this blog post) doesn’t mention the company name. It’s all image. People buy image, and people want to reinforce self-image. People want others to see what they own. That’s why, when I visit some collectors, they’ll say, “Do you want to see my Mundy? Or my Schmid?” or their “Warhol or Hockney” or their “Sergeant or Zorn.”

Building your brand matters. Giving meaning to your name, ensuring your paintings are perceived as the best, is a critically important process. People will pay more for it.

Even in the lower price ranges, the person who buys a $1,500 painting is just as likely to buy a $3,000 painting. So if you’re in a gallery, giving up half your profit means doing without either $750 or $1,500. Which is better?

Let’s do the math.

Let’s say you sell 10 paintings a year at $1,500 each. Your total sales are $15,000, and your profit is $7,500.

Now, let’s say you raise your price to $3,000 and you lose 20% of your buyers, so you sell only eight paintings a year. Your total sales are $24,000 and your profit is $12,000. Which is better?

Let’s take it further. Raise your price to $4,000 and lose 30% of your buyers. Now you sell seven paintings a year, for a total of $28,000 and $14,000 in profit. You made double the profit of selling at the $1,500 price and you only had to paint seven paintings instead of 10.

The snowball effect also kicks in. First, your paintings get better because you can spend more time on them. Second, the gallery is making more money on you, so they push your paintings more. Third, because your prices are higher, you are perceived by the buyer as more valuable. Fourth, by painting less, you create scarcity, which actually boosts sales and prices. “Jane only paints seven paintings a year. You can own one of the seven” is a powerful statement, the kind galleries love to make.

Have Some Guts

I had dinner this year with a very famous artist who produces about four paintings a year and makes close to a quarter million a year from them. I asked how he got his prices up, and he told me that he had no idea what he should be charging for his paintings, so he just picked a number out of the air. He sold his first painting for $40,000 because he didn't know he couldn’t. It only went up from there.

Most price resistance is in your head because you can't afford to spend a lot of money on a painting. Your customer can. I have readers of Fine Art Connoisseur who don’t think twice about dropping 100 grand on a painting.

Tip #5: Go for it. Raise your prices. Be bold.

The way to get your prices up is to have some guts. And if you’re not raising your prices every year, you’re losing money because of inflation. Have you noticed how much more groceries cost?

Some galleries will give you resistance, and it's the kiss of death if you have low prices at one gallery and high prices at another. So you have to notify your gallery of your universal price increase. If the gallery does not support you or believe they can get that price, it's time to leave and find someone who thinks your new price is perfect. People cannot sell what they don’t believe in. Find believers.

Lipstick on a Pig?

I’ll end with a story a dealer once told me. He said he had a beautiful painting that sat in the gallery for a year, priced at $1,400. He could not understand why it was not selling, so he took it off the wall, put a $1,500 frame on it and raised the price to $14,000. It sold within a week. Same painting. Was it the frame or the price? I suspect it was both.

A painting in a cheap frame won’t be perceived as being worth much, but an elegant frame sends a signal. Who would you rather do business with? A financial adviser who drives up in a Hyundai, or one who drives up in a Bentley? It probably depends on your value system, but I’d pick the adviser who appears more successful. For people who use their cars in business, cars are like picture frames. If I’m selling a $10 million house, I want the agent in the most expensive car.

Price also impacted that sale. A painting is better if it’s more expensive — that is the perception of luxury buyers. The combination of great frame and great price cemented that deal.

Tip #6: Framing sends a signal to support your prices. Expensive frames allow you to increase even more.

In summary: You will lose some customers at a higher price, but you’ll make more money and work less. Build the importance of your brand with constant repetition over years and a luxury appearance. (A great trick is to put your high price in your ads, which instantly packages you as a more expensive artist. Again, this takes guts.)

I believe most artists could double their prices and not lose any customers. Your prices will rise. But it all starts with your understanding of pricing — and having the guts to do it.

Comments

Great post. Very true - luxury branding is all about perception - you have to set the bar for yourself in your art business and value your work highly. Once you do that, you put yourself in a position for others to value your work at that level.

There is an artist in Slovakia named Tibor Nagy who in my opinion and several of my friends who thinks Mr Nagy is every bit an artist's artist
that there ever was. Please check out his art on his web site and think about what a benefit his presence at Plein Air 16 would be. I contacted him via email with the suggestion that he attend and he replied that he lived half way around the world and didn't have enough paintings ?? but I would love for him to come share his expertise, talent and wonder with us.
Could you have any influence? I'd be surprised if you said not.

To backtrack a little, On your Christmas in July idea, I did it. I sent out 66 Christmas mailers to clients who have purchased original paintings in the past. I modified your sample letter to fit my scene & my clients, and included the candy cane in the envelope! Lo and behold, I have gotten a Commission to do as a surprise Christmas present for a spouse! It was worth the time and postage! Thank you Eric!

Eric, A few things: if we are underpaid and not selling, how do you propose we buy superexpensive frames to surround our paintings? : I live in an area with MANY galleries. These businesses are looking at their own bottom line and most will not price high because it reduces the number of people who can/will pay for it. The few high end galleries with the $2000.00 + paintings will witness a $2000.00 one hanging for well over a year before they, or the artist, finally sell it.: And then, usually, that customer got it on sale because they were aware of how long it hung there.(They talked the gallery owner down in price) : Most customers have NO IDEA that the gallery gets 1/2 of that sale.Which brings me to this-if you really want to make money, do only commissions. But, for that, you need a P.R. person and they are difficult to find/employ, at least in Florida. : Area is relevant; I did much better in Wisconsin 15 years ago. :
finally, you mentioned something about hanging in more than one gallery at once. Can't do that! at least not here, where there is a 25 mile radius for exclusivity, making your paintings seem more "rare". Your article is okay but I don't think you fully understand our field. And I don't want someone to buy my piecejust because it was expensive (what an insult!)...I want them to truly enjoy and cherish it, not show off their wallet.

I lived in the States for 15?years up till 2002. I was labelled a wildlife artist and was doing pretty well. Went back to SA for 11 years. Since I returned last year I have won three 1st places in an online art competition. Have been accepted into very good galleries. Was accepted into two more art organizations .
My prices came down due to the fact that I had to re establish myself in the USA. But sales have been very slow. I push myself my name on FB LinkedIn, Twitter, Pinterest google+. Now am advertising in a top notch art magazine. What do I need to do to get more sales. I have put up my prices as of now. Still reasonable but an increase as I knew I was too cheap. Especially that I am a realist artist and it takes me a long time to paint one piece. I put my heart and soul into each piece. Whatever can I do to boost my sales. Prices have been raised for the up coming season.?

As a painter for over 30 years I so agree with Eric. I have done very well over most of these years selling in a low to mid range. Once our economy went down the drain I lost the low and middle income buyers. They're gone. I have since started painting a lot larger and raised my prices for the high end buyer since they seem to be the only ones buying. It works.
If something doesn't sell I raise the price instead of lowering it.

Some of what Eric says is true, but some of us who have been around see a lot of the other side of some of these issues. There are more artists that are putting their prices way over what they are worth..trying to sell them at prices that are just not equal to their quality. I know there are more like me in their feelings about all of this and I hope they have the chance to chime in! There is another side to all of this and one or two examples does not make It so for everyone. I appreciate and respect Eric for much of what he has done, but not so sure that some of this advice is so good for everyone.

I'm a watercolor artist, charging above average prices in my market (Honolulu), but not nearly the kinds of prices you mention. Does the medium we use dictate any kind of pricing structure or is this more brainwashing?

This is so, so, so true. I've slowly raised my prices over the years, and I went from having a stack of originals that no one buys, to struggling to fill a gallery show because my originals are selling as fast as I make them.

But I noticed that I still struggle to keep from wincing when I say my prices, to wait for that inevitable 'you are so overpriced' reaction.

Eric- what a wonderful post (as always). It's so true what you've said, unfortunately too many artists are brainwashed into not believing that they can charge so much more for their work. I believed it too when I was first starting out, but now I think the way you outlined it above. Your post just reinforced that I am on now on the right track. I hope your post gets through to lots of artists.